The AP (5/14, Ohlemacher, Alonso-Zaldivar) reported that the government’s annual report on the state of Medicare and Social Security concludes that the “bad economy is worsening the already-shaky finances” of the two programs, “draining the trust funds supporting them faster than expected and intensifying the need for Congress” to shore them up. Both entitlements “are being hit by a double whammy: the long-anticipated wave of retiring baby boomers and weaker-than-expected tax receipts.”
Bloomberg News (5/13, Armstrong, Faler) reported, “While Medicare won’t have sufficient funds to pay full benefits starting in 2024, five years earlier than last year’s estimate, Social Security’s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection,” the report said. The New York Times (5/14, A12, Pear, Subscription Publication) reported that Medicare trustees “said that payroll tax revenues, which provide most of the money for Medicare’s hospital insurance trust fund, were lower than expected last year because earnings were ‘considerably lower than projected’ and the economy was weaker than expected.” Still, without the healthcare law, said HHS Secretary Kathleen Sebelius, “Medicare would have gone bankrupt in 2016, only five years from now.”
The Los Angeles Times (5/14, Levey) said that “the faltering Medicare finances — caused in part by the sluggish economy — are expected to intensify pressure on both parties in Washington to move forcefully to shore up the health plan that covers care for more than 47 million elderly and disabled Americans.” Treasury Secretary Geithner said, “Americans are living longer, and healthcare costs are continuing to rise. And if we do not do more to contain the rate of growth in healthcare costs, then our commitments will become unsustainable.”
The Washington Post (5/14, Aizenman) said the report “offers fuel to President Obama’s Republican critics and increases pressure on leaders of both parties to agree on a long-term plan to preserve the nation’s principal safety net for the elderly.” The Wall Street Journal (5/14, Paletta, Subscription Publication) reported that 47.5 million Americans received Medicare in 2010, while 54 million collected Social Security benefits.
Sebelius Addresses Medicare Concerns On White House Blog. The Hill (5/14, Pecquet) reported in its “Healthwatch” blog that Sebelius “took to the White House blog Friday to assuage concerns about” Medicare’s “solvency after a new report found that it would run out of money to pay for seniors’ hospital care in 2024.” She said that Medicare and Social Security “‘are strong’ but ‘there is far more work to be done.'” Sebelius added, “The right way to reform Medicare is to improve it so people get better care at a lower cost. … And the fiscal framework the President proposed just three weeks ago takes significant steps to extend the solvency of the program, while strengthening Medicare for future generations.”